Revealed Comparative Advantage and the Alternatives as Measures of International Specialisation

Keld Laursen (kl.ino@cbs.dk)

No 98-30, DRUID Working Papers from DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies

Abstract: The paper is an analysis of Balassa’s ‘revealed comparative advantage’ (RCA). The papers shows that when using the RCA, it should always be adjusted in such a way, so that it becomes symmetric. The conclusion is based on a theoretical discussion of the properties of the measure, but also on convincing empirical evidence, based on the Jarque-Bera test of normality of the error terms from regressions, using both the RCA and the ‘Revealed Symmetric Comparative Advantage’ (the RSCA). The RSCA is also compared to other measures of international trade specialisation. These measures included the Michaely index and the chi square measure. The conclusion emerging from the analysis is that the RSCA is - on balance - the best measure of comparative

Keywords: revealed comparative advantage; international specialisation (search for similar items in EconPapers)
JEL-codes: C43 F14 (search for similar items in EconPapers)
Date: 1998
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Citations: View citations in EconPapers (128)

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